would mean to get only the item and qty fields in the matched documents

The third parameter is the callback function which is called after the query is complete. function(e, docs) is the mongodb driver for node.js syntax. The 1st parameter e is the error. docs is the array of matched documents. If an error occurs it is given in e. If the query is successful the matched documents are given in the 2nd parameter docs(the name can be anything you want).

The cursor has various methods which can be used to manipulate the matched documents before mongoDB returns them.
collection.find( { qty: { $gt: 25 } }, { item: 1, qty: 1 })
is a cursor you can do various operations on it.